Why are Bulgarian Property Prices Increasing?

Excerpt from an article at imotibg.com

The Bulgarian real estate market is yet another free, unregulated market, where the mechanisms of supply and demand command the movement of prices up- or down-wards.At the same time, the real estate market has some specific characteristics, which make it a unique market: lack of sufficient information; a reaction lag as compared to the other sectors of the economy; non-standardised product; lack of mobility of properties, as well as, buyers and sellers; limited number of transactions in one’s lifetime.Therefore the smooth mechanisms of the free market economy would be influenced by all of these factors and should be taken into consideration when analysing the property market.

Any student in economics would tell you that prices rise when either supply shrinks or demand increases.What has happened on the Bulgarian real estate market this year?Both supply and demand have grown significantly with demand outpacing supply and therefore leading to higher sales prices.

What is more interesting is what has caused demand to grow at such pace and incur such media coverage? The size of the population, disposable income of the population, availability of mortgage credits and government actions can influence demand for residential properties.

The overall population of Bulgaria has been decreasing slowly in recent years, but at the same time the poor economic conditions in the countryside have forced many Bulgarians to move to the bigger cities and especially to the capital.This has led to an increase in the number of potential buyers of real estate in Sofia and the bigger cities. As a result the real estate market has been most active in these markets and is expected to continue to be in the short and medium term.

To read the full article visit Imotibg.com